04.19.10

Gemini version available ♊︎

The SEC is Going After Microsoft (Again), Not Just Goldman Sachs

Posted in Finance, Fraud, Microsoft, Search, Steve Ballmer at 6:49 am by Dr. Roy Schestowitz

US Securities and Exchange Commission Seal

Summary: The SEC (U.S. Securities and Exchange Commission) contacts Steve Ballmer regarding oddities in Microsoft’s latest financial report

WE WISH to begin with factual background that a lot of people are unaware of. A few months ago, right around the time that Microsoft's CFO quit he was also paid millions of dollars by Microsoft to keep his mouth shut. This is not a standard transaction. This could indicate malpractice and there is reason for prejudice because the SEC previously caught and investigated Microsoft for financial fraud (Microsoft eventually settled), after a Microsoft employee, Charles Pancerzewski, had blown the whistle and presented to the judge convincing evidence of fraud taking place at Microsoft. Microsoft paid Pancerzewski millions of dollars to shut him up and eliminate his evidence [1, 2]. It’s a typical maneuver from Microsoft, which also hires/pays critics to walk away and not share their knowledge with the public. We gave several examples of this before.

A few days ago we wrote about Microsoft’s close relationship with US banks/the Fed, which are aflood with misconduct these days. They contact Microsoft for help brainwashing the public [1, 2, 3, 4, 5, 6, 7, 8, 9], as we noted some days ago when we wrote about the SEC suing Goldman Sachs for fraud. For those who have not read that previous post, Microsoft’s CEO was asked to create a seasonly game to teach the public about deficit crunching (Microsoft too has debt) and as this new article shows, using games to brainwash minds is not out of the ordinary (war games are the most famous example).

PepsiCo International and Microsoft have teamed up to create an integrated digital advergaming campaign to take advantage of what’s expected to be increasing interest in soccer as the World Cup gets underway.

But anyway, here is the interesting development. Pogson has found this document [PDF] buried inside the SEC’s Web site. Since it is available as a PDF, we decided to append it at the bottom as plain text. Microsoft’s response is an HTML-formatted mail and here is what Pogson makes of it:

Then, in the last quarterly report, M$ combined that other OS and “live” segments. I guess they thought a zigzag in the curve would hide something like the inflection in the client OS stuff. Further, internally, they use a different set of books, omitting some important details. So, investors should be comforted knowing that internal decisions are made on false assumptions. We have known for years that including the browser in the OS was done not for good business reasons but to exclude competition from the market. I guess that other search engine is more of the same.

There is actually more to it because Microsoft is ‘embellishing’ its numbers by deferring revenue, for example [1, 2, 3, 4]. One writer asks about Microsoft: “Are we seeing a revival?” Well, only if Microsoft’s lies are being believed because in the previous quarter just about any business unit at Microsoft was down. Yes, it was mostly down, but Microsoft claims a surge.

Let me be clear. I’m not a fan of Microsoft (NASDAQ:MSFT). I dislike its products and I don’t much like its business policies. I’m a child of the open source world and a fan of cloud computing, and Microsoft has long been a dirty word as far as I’m concerned. It’s probably a dirty word as far as many investors are concerned.

Wallstcheatsheet.com, which is another news site, has just published the article “Proof Microsoft has Become Irrelevant” and it says:

If this keeps up [for Bing] , Microsoft may want to rename it ‘Ding’ because that’s how big an impact they’ve had in the search space.

For the moment, Kin and Bing are not making huge waves.

We wrote about it in the previous post. Bing as a “success” is part of an illusion Microsoft is spreading and Kin is a major disappointment which we’ll address in the next post. There is more to Microsoft’s financial reports than meets the eye. Don’t believe what you see next week when Microsoft releases another report and immediately spins it as “success”. Microsoft is not honest about its financial situation.



Mail Stop 4561
                                                             December 11, 2009
Mr. Steven A. Ballmer
Director and Chief Executive Officer
Microsoft Corporation
One Microsoft Way,
Redmond, Washington 98052-6399

        Re:    Microsoft Corporation
               Form 10-K for the Fiscal Year Ended June 30, 2009
               Filed July 30, 2009
               01-14278

Dear Mr. Ballmer:
        We have reviewed the above-referenced filing and have the following comments.
Please be as detailed as necessary in your explanation. After reviewing this information,
we may raise additional comments.

        Please understand that the purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our
review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the Fiscal Year Ended June 30, 2009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Segment Product Revenue/Operating Income (Loss)
Online Services Business, page 25

1.      We note that the operating loss for your Online Services Business increased by
        102% and 84% in 2008 and 2009, respectively, and is a significant portion of your


Mr. Steven Ballmer Microsoft Corporation December 11, 2009 Page 2 consolidated operating income in 2009. Tell us whether these increasing losses are indicative of future results and the consideration given to identifying and quantifying any related known trends, events and uncertainties that would reasonably be expected to have a material impact on your liquidity, capital resources and/or results of operations. Refer to Item 303(A) (3) (ii) of Regulation S-K and Section III.B.3 of SEC Release 34-48960. Item 8. Financial Statements and Supplementary Data Note 22. Segment Information and Geographic Data, page 77 2. Tell us what consideration you gave to reporting revenue from external customers for each of your products and services or each group of similar product and services in accordance with paragraph 37 of SFAS 131. 3. You indicate that your financial reporting systems provide more than one measure of segment profit and loss for management to operate the business, including internal profit and loss statements prepared on a basis not consistent with U.S. GAAP. Tell us what consideration you gave to reporting the segment information that is most consistent with that used in your consolidated financial statements. In this regard, we note that the segment information provided beginning on page 23 is presented in accordance with U.S. GAAP. Refer to paragraph 30 of SFAS 131. 4. We note your statement that segments are not designed to measure operating income or loss directly related to the products included in each segment, due to your integrated business structure. Further explain this assertion and tell us what operating costs are excluded from each segment. In light of this apparent limitation of the data, indicate how the segment information presented is reliable and relevant to users of your financial statements. 5. You state that “inter-segment cost commissions are estimated by management and used to compensate or charge each segment for such shared costs and to incent shared efforts.” Clarify for us what is meant by these estimated inter-segment cost commissions and tell us what consideration you gave to describing in the note the basis of measuring this allocation. Also, clarify what is meant by allocating cost commission “to incent shared efforts.” Explain your basis for determining the appropriate amounts that will provide motivation and justify why management believes the allocation methodology is reasonable. Refer to paragraphs 25(b) and 29 of SFAS 131. ******* Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please submit all correspondence and supplemental
Mr. Steven Ballmer Microsoft Corporation December 11, 2009 Page 3 materials on EDGAR as required by Rule 101 of Regulation S-T. If you amend your filing, you may wish to provide us with marked copies of any amendment to expedite our review. Please furnish a cover letter that keys your response to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing any amendment and your response to our comments. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed investment decision. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: • the company is responsible for the adequacy and accuracy of the disclosure in the filing; • staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and • the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Corporation Finance in our review of your filing or in response to our comments on your filing. You may contact Melissa Walsh, Staff Accountant, at (202) 551-3224 if you have any questions regarding comments on the financial statements and related matters. If you need further assistance, you may contact me at (202) 551-3226 Sincerely, Craig D. Wilson Sr. Asst. Chief Accountant

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

2 Comments

  1. your_friend said,

    April 21, 2010 at 6:55 pm

    Gravatar

    It’s about time the SEC got on Microsoft and their letter is quite a slap down on the usual monkey business. Well done, SEC, please follow up.

  2. uberVU - social comments said,

    April 25, 2010 at 9:21 am

    Social comments and analytics for this post…

    This post was mentioned on Identica by schestowitz: The #SEC is Going After #Microsoft (Again), Not Just #GoldmanSachs http://ur1.ca/vvaf #finance #fraud #regulation #steveballmer…

DecorWhat Else is New


  1. IRC Proceedings: Friday, November 26, 2021

    IRC logs for Friday, November 26, 2021



  2. 38+ Years of GNU and 19+ Years of FSF Associate Membership

    “On November 25, 2002,” Wikipedia notes, “the FSF launched the FSF Associate Membership program for individuals.” As the above video points out, it all started almost 40 years ago.



  3. Gemini as a Platform for Gamers

    Contrary to what people often assume (or are led to assume), even without client-side scripting Gemini can accomplish a great deal; early adopters, many of whom are technical, test the limits of the very minimalistic (by design and intention) specification



  4. Improved Workflows: Achievement Unlocked

    Today we've completed a bunch of small projects that can make us more efficient (e.g. more Daily Links per day, more articles); the above video was recorded many hours ago to accompany the outline below



  5. Links 26/11/2021: New Complaint About Microsoft Competition Crimes in Europe, EuroLinux 8.5, GhostBSD 21.11.24, and Kiwi TCMS 10.5 Released

    Links for the day



  6. Links 26/11/2021: F35 Elections, Whonix 16.0.3.7, OSMC's November Refresh With Kodi 19.3

    Links for the day



  7. IRC Proceedings: Thursday, November 25, 2021

    IRC logs for Thursday, November 25, 2021



  8. IRC Proceedings: Wednesday, November 24, 2021

    IRC logs for Wednesday, November 24, 2021



  9. Links 25/11/2021: PHP 8.1.0 Released and Linux 5.15.5

    Links for the day



  10. IBM as Master of Hypocrisy

    Free software projects and Free software developers have long been humiliated by corporations of Western misogynists, falsely claiming that the Free software community isn’t inclusive enough (these are shameless projection tactics; as a matter of public record, the exact opposite is true) and even the eradication of supposedly offensive language isn’t something IBM takes seriously



  11. Links 25/11/2021: LibreOffice 7.2.3 and Mesa 21.2.6 Released

    Links for the day



  12. [Meme] So Desperate That Edge Cannot Even Exceed 4% That They Block Rival Web Browsers

    Linux/Android/Free Software/GNU (they go by very many names/brands) may continue to grow to the point where Windows is as irrelevant as Blackberry; this means that Microsoft’s grip on the Web too has slipped — to the point where Microsoft frantically uses 'bailout' money to hijack LinkedIn, GitHub, etc. (it also rebrands almost everything as "Azure" or clown to fake a perception of growth)



  13. Windows Vista Service Pack 11 (Vista 11) Has Failed to Curb the Growth of GNU/Linux

    Windows market share continues to decrease in spite of billions of dollars spent bribing the media for fake hype, especially in light of a new Windows Service Pack (SP), Vista SP 11



  14. Links 25/11/2021: Proton 6.3-8 and Linux Mint Compared to Ubuntu

    Links for the day



  15. 3.5 Years Later the 'Master' of Fedora is Still Microsoft and IBM Cannot Be Bothered to Alter Git Branch Names (Refuting or Ignoring Its Very Own Directive About Supposedly Racially-Insensitive Terms)

    Today we demonstrate the hypocrisy of IBM; years after telling us that we should shun the term "master" and repeatedly insisting it had a racist connotation at least 65 Fedora repositories, still controlled by Microsoft, still use "master"



  16. Changing the Arrangement While News is a Bit Slow(er)

    I've made it easier for myself to keep abreast of things like IRC channels and networks (incidentally, a day ago Freenode reopened to anonymous logins) and I've improved monitoring of the Web sites, Gemini capsule etc. (this video is unplanned and improvised)



  17. Links 24/11/2021: Alpine Linux 3.15 and Endless OS 4.0 Released

    Links for the day



  18. [Meme] Jimmy Zemlin Loves Microsoft

    It’s funny, isn’t it? Lying for a living and sucking up to the liars pays off; you get to plunder actual Linux users while leaving Linux morally and financially bankrupt



  19. Links 24/11/2021: PHP Foundation and Flatpak Criticisms

    Links for the day



  20. IRC Proceedings: Tuesday, November 23, 2021

    IRC logs for Tuesday, November 23, 2021



  21. Links 24/11/2021: Rust Crisis and Team UPC Still Faking 'Progress'

    Links for the day



  22. Links 23/11/2021: New GNU Parallel and Memories of David H. Adler (Perl, Raku)

    Links for the day



  23. In Light of Fast-Accelerating Deterioration -- Sometimes Weaponisation -- Getting Off the World Wide Web (to the Extent Feasible) Makes You Saner and Less Susceptible to Manipulation, Lies

    Almost no sites are speaking about it (probably because they have no presence on the Internet except on the Web), but it's time to motivate more people to get off the Web, for their own good and for society's sake...



  24. Black Friday SPAM on the World Wide Web: A Reminder That the Web is a Dying Platform, Languishing Due to Marketing and Misinformation

    The junk that overruns the Web this 'Black Friday' week (consumerism 'on steroids') is a good reminder that the Web isn't healthy for the mind anymore; it's mostly spying on people, trying to compel them to buy particular things or vote a certain way



  25. Microsoft-Led Misinformation Campaign About Germany and Munich Reminds Us That Microsoft Hates and Actively Undermines GNU/Linux Adoption

    Regarding the latest moves to GNU/Linux in Germany we have 3 points to make



  26. Links 23/11/2021: Libreboot 20211122, Deepin Linux 20.3, Amazon Linux 2022, and Mabox Linux 21.11 Released

    Links for the day



  27. IRC Proceedings: Monday, November 22, 2021

    IRC logs for Monday, November 22, 2021



  28. Links 22/11/2021: EasyOS Dunfell 3.1.11, Microsoft 'Extends' Mesa for Windows

    Links for the day



  29. Microsoft's GitHub is Hugely Toxic and It Censors Critics of Corporations or People Sceptical of Those in Power

    Sociopaths have taken over GitHub and control over GitHub (by Microsoft) is being shamelessly misused, just as we’ve warned all along; GitHub is social control media/network for code, asserting control over projects and developers by means of censorship and other sanctions



  30. EPO Staff Engagement Survey Predates the Pandemic and Provides False Assumptions for EPO Policies or Policy-Setting

    The EPO ticks a box for "surveying the staff", but is it actually listening? Is that done often enough? It was last done almost 3 years ago...


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts